A Charity To Revise Practices

By DONALD JANSON

Published: September 25, 1988

CHALLENGED by the Better Business Bureau of Metropolitan New York, a small national charity based in Bergen County says it is revising its fund-raising practices.

Louis J. Hover, chairman of the Foundation to Find and Protect America's Children, said donations placed in canisters in stores would be counted by a foundation committee and verified by a certified public accountant engaged by the foundation.

Previously the canisters were collected by the charity's New York City fund-raiser and taken to the New York City office of the fund-raiser's accountant for counting, Mr. Hover said.

The Better Business Bureau's New York Philanthropic Advisory Service asserted in a report Aug. 9 that the foundation lacked control over contributions and over fund-raising done on its behalf. Accountability Questioned

The bureau also said that the legend on the canisters misled donors, that too small a percentage of the funds collected was being spent for the purpose for which the money was donated, and that the charity provided inadequate reporting and auditing to assure accountability.

The bureau turned its findings over to the New York Attorney General's office, which is investigating.

Mr. Hover and his wife, Barbara, established the foundation in 1984 to help parents find missing children, to educate parents and children about the problem, and to lobby for legislation to protect children.

The foundation's office is in Wykcoff, where the Hovers live. Revenue has ranged from $49,355 in 1985 to $14,757 last year, according to foundation reports on file with New Jersey's Office of Charitable Registrations and Investigations in Newark and New York's Office of Charities Registration in Albany. Action Called 'Overkill'

Mr. Hover, an environmental chemist who devotes part time to the charity, said it was a case of ''overkill'' for the Better Business Bureau to pursue so small an operation. He said he had not realized that the charity had to register with New York City as well as the states where it did business.

He said he had not intended to imply, with a canister legend using the name of the National Center for Missing and Exploited Children in Washington, that his charity was affiliated with the nationally known center. He said the legend had been changed since the bureau complained.

Mr. Hover said the foundation had been providing only annual financial statements, rather than annual reports and audits and budgets, because the project was small and funds were limited. But he said that after the bureau report, the foundation had acquired the donated services of a certified public accountant and woul comply with all requirements.

He said his wife, the president and only salaried member of the board, was not being paid now and would not be until the volume of donations increases. The bureau had noted that only 37 percent of the charity's revenues were spent on missing-children programs last year, less than on management expenses.

Mr. Hover said that more than 50 percent went to meet program goals in previous years.

With donations declining, the foundation tried canisters this year for the first time. That, according to Marsha Gilmer, director of nonprofit relations for the National Center for Missing and Exploited Children, was a mistake.

She said canister solicitations by little-known charities had acquired a dubious name in the recent past after instances of stolen donations.

''They should call off this canister program,'' she said. A Change in Procedure

Mr. Hover said he intended to retain it, but hereafter would have his fund-raiser, Mail Technology of Manhattan, bring the canisters unopened to New Jersey for counting.

He said 150 canisters had been placed in ''mom and pop'' stores in New York, like delicatessens, and 150 in similar stores in Bergen, Union, Essex Counties and other counties in New Jersey.

Since the Better Business Bureau began raising questions in May, he said, the canisters in New York have been removed. He said they would not be restored until his accountant completes an audit and the counting committee, to be composed of backers of the charity, is appointed.

Mail Technology collects and re-places the New Jersey canisters as well as those in New York, though collection was suspended by the foundation until the new accounting system was put in place.

The bureau complained that no contract specifying the amount of remuneration for Mail Technology's work with the canister program was on file with the Office of Charities Registration.

A 1986 contract, for a direct-mail donation campaign by Mail Technology for the foundation, was never implemented. It provided that the fund-raiser receive expenses plus half of the net income from the venture. This was amended last year to give the charity half of the total income collected.